Special Report 75: Conditions and perspectives in the German health insurances system

Special Report by the Monopolies Commission pursuant to Section 44(1)(4) ARC, 7 March 2017

The Monopolies Commission criticizes competition deficits in statutory and private health insurance, which reduce the efficiency of the health insurance system and burden the insureds with unnecessary cost.

The Monopolies Commission argues for more leeway for the health care management in statutory health insurance and advocates developing the risk adjustment scheme (Risikostrukturausgleich) further to eliminate distortions of competition.

The Monopolies Commission proposes a concept for rendering the change of private health insurance providers more attractive and recommends to facilitate the combination of tariffs whenever private insurers merge.

The Monopolies Commission has submitted its 75th Special Report today, which is entitled: „Conditions and perspectives in the German health insurances system". In this Report, it highlights the existence of considerable unused potential in the health insurances system in Germany. If this potential were exploited, this could strengthen the long-term viability of the German health insurance systems substantially.

The statutory and private health insurance providers face significant challenges, including successively increasing costs for the health care system. The existing health insurances system reduces the incentives for insurance carriers to look for ways to ensure optimal health care for the insured while saving expenditures at the same time. In addition, it is time to embrace the chances of digitalisation in the health insurance sector, such as better prevention through individual, app-based services, or providing for better adjusted treatment journeys by linking up physicians, patients, and insurance carriers. „Strengthening competition within the health insurances systems is a prerequisite for improving health care for the insureds and for reducing costs alike", said the chair of the Monopolies Commission, Professor Achim Wambach.

To mitigate the impediments to competition in the management of health care in statutory health insurance, and to create effective competition on the quality side, health care providers should offer tariffs designed as optional tariffs, and be allowed to offer more varied tariffs. The options to steer insured to the care providers should be strengthened. Moreover, it should be allowed to restrict selective treatments to hospitals with which a quality agreement has been negotiated. The risk adjustment scheme should be developed further such that the apportionment of funds to insurance providers takes account of public health measures. Regional differences in the level of expenditures should be reflected in the earnings of the carriers.

In private health insurance, the options for existing customers to change from one private health insurance provider to another must be improved. In the current system, private insurers compete for new customers. In contrast, existing customers have only very limited options to change their insurance carrier of choice because they can only take a small share of their ageing reserves with them. The Monopolies Commission presents a concept according to which private insureds can take ageing reserves reflecting their state of health with them when they change their insurance provider. In addition, to reduce the obstacles for dynamic processes, the combination of tariffs whenever private insurers merge should be facilitated to the extent that the care under the tariffs is of equal quality and the interests of the insureds are taken into account when the tariffs are combined.